California Termination Laws – 5 That Every Worker Should Know

California has strict termination laws that regulate why and how you can be discharged from your job. Here are five rules that every employee should be aware of:

1. California is an at-will employment state.
2. There are certain reasons you cannot be fired for.
3. You must get a final paycheck upon discharge.
4. You must get notice before certain mass layoffs.
5. Having no choice but to quit is like being fired.

Note that these California termination laws apply only to employees, not to independent contractors.

1. California Is an At-Will Employment State

Like every other state in the U.S. except for Montana, California presumes that employment is at-will. This means that either you or your employer can end the employment at any time and for any reason at all, or for no reason.

You will be an at-will employee unless:

• you and your employer agree otherwise, or
• there is an exception to the presumption of at-will employment.¹

You and your employer can agree that it is not an at-will employment arrangement in the employment contract. Generally, though, the employment contract will explicitly state that the job is at-will.

2. There Are Certain Reasons You Cannot Be Fired

Even if you are an at-will employee in California, your employer is not allowed to fire you because you:

• exercised a legal right or privilege in the workplace, such as medical leave under the California Family Rights Act; or
• performed a legal obligation; or
• reported a potential violation of the law (“whistleblowing”); or
• refused to break the law.²

A common ground for a wrongful termination claim is being fired out of retaliation for your filing a discrimination claim under the California Fair Employment and Housing Act (FEHA). This is a claim that your employer is discriminating against you based on any of the following protected classes:

• national origin,
• race,
• sex,
• marital status,
• gender or gender identity,
• sexual orientation,
• genetic information,
• medical condition,
• disability, and
• many others.³

If you suspect that you were fired for any of these unlawful reasons, there are various ways you can seek reinstatement or back pay. This includes filing a complaint with California’s Civil Rights Department (CRD) or filing a lawsuit.

3. You Must Get a Final Paycheck Upon Discharge

If you have been terminated from your job in California, you must immediately receive the wages that you have earned. These earned wages include:

• any wages that still have not been paid to you, and
• unused vacation time, and
• any other unused but accrued paid time off (PTO).

Note that if you quit and provided at least 72 hours of notice of your resignation, then you must receive your final paycheck on your last day of work. Otherwise, you must get your final paycheck within 72 hours.

If your employer willfully fails to pay on time, you are also entitled to waiting time penalties.⁴

4. You Must Get Notice Before Certain Mass Layoffs

The California Worker Adjustment and Retraining Notification Act (WARN Act) regulates mass layoffs in the state. Employers with at least 75 employees in the past year must provide at least 60 days of advance notice to workers and local government officials before a:

• mass layoff of 50 or more employees in a 30-day period, or
• major relocation to somewhere 100 or more miles away, or
• plant closure of at least a substantial portion of the activities.

Employers that fail to provide adequate notice must give back pay and benefits to fired employees for the number of days that the employer was silent.

There is a federal equivalent of California’s WARN Act, but its protections are less extensive. Terminated employees generally invoke their employee rights under California’s law, instead.⁵

5. Having No Choice But To Quit Is Like Being Fired

A constructive termination happens when your employer makes your working conditions so unbearable that a reasonable employee would have no choice but to quit.

In these cases, you may have grounds for a wrongful termination suit even though you quit. To bring a valid claim, you would have to show that:

• your employer intentionally or knowingly created an intolerable working situation for you; and
• you had no choice but to resign due to those conditions; and
• had your employer explicitly fired you, you would have had a valid claim for wrongful termination against them.⁶

Frequently Asked Questions

What can I do if I have been wrongfully terminated?

Depending on your case, you can file a complaint with California’s Civil Rights Department (CRD) or file a lawsuit. These lawsuits can demand the following types of damages:

• lost wages and benefits, also known as back pay,
• lost future wages, or front pay,
• emotional distress,
• attorneys’ fees,
• court costs,
• punitive damages, and
• injunctive relief, such as reinstatement to your old job.

What if my employer is refusing to pay my final wages?

If you have been terminated but your former employer is refusing to pay your final wages, you can file a complaint with the California Labor Commissioner or file a wage and hour lawsuit. These lawsuits demand reimbursement for your unpaid wages as well as:

• unpaid overtime,
• meal or rest breaks that were not provided,
• wages for hours worked “off the clock,”
• a waiting time penalty,
• liquidated damages,
• attorneys’ fees, and
• court costs.⁷

How long do I have to file a wrongful termination claim in California?

The deadline, or “statute of limitations,” depends on the specific legal grounds of your claim:

• Breach of Implied Contract / Public Policy violations: Generally two years from the date of termination.
• Discrimination / Harassment (FEHA claims): Generally three years to file a complaint with the California Civil Rights Department (CRD).
• Breach of Written Contract: Generally four years from the date of termination.
• Federal Claims: Deadlines can be as short as 180 days.

It is critical to consult an attorney immediately to ensure you do not miss these strict deadlines.

What evidence should I gather to prove my claim?

Documentation is key. To build a strong case, try to gather:

• Performance Reviews: To prove you were a good employee.
• Communications: Emails, texts, or Slack messages regarding your termination or the events leading up to it.
• The Employee Handbook: To show if the company violated its own disciplinary policies.
• Witness Info: Names and contact info of colleagues who witnessed the unfair treatment.

Can I collect unemployment benefits if I plan to sue for wrongful termination?

Generally, yes. You are entitled to unemployment benefits in California unless you were fired for “misconduct” (intentional violation of rules). Collecting benefits usually does not hurt your ability to sue.

However, be honest during your EDD (Employment Development Department) interview, as statements you make to the EDD can sometimes be used in your lawsuit.

I was fired while on “probation.” Does that mean I have no rights?

No. While being on probation makes it easier for an employer to fire you for general unsuitability, it does not give them the right to discriminate against you.

If you were fired during your probationary period because of your race, disability, or for reporting safety violations, you still have the right to file a wrongful termination claim.

Should I sign a severance agreement if I am fired?

Do not sign immediately. Most severance agreements contain a “release of claims” clause, meaning that by signing, you give up your right to sue the company for wrongful termination.

While the money may be tempting, your legal claim could be worth significantly more than the severance offer. Always have a California employment attorney review the agreement before you sign.

Additional Reading

For more in-depth information, refer to these articles:

• Wrongful termination and the expanding public policy exception: Implications and advice – SAM Advanced Management Journal.
• The Legal Consequences of a Wrongful Termination – Constitutional Law International.
• Adverse Employment Action in Retaliation Cases – University of Baltimore Law Review.
• Past, Present, and Future in Wrongful Termination Law – Labor Law.
• How To Resign From Your Job In The Most Professional Way – Forbes.

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Legal references